Two people have been arrested in Manhattan on suspicion of attempting to launder the stolen funds — and Bitfinex now hopes to be reunited with the Bitcoin it lost six years ago.
Cryptocurrency worth $3.6 billion has been recovered by the U.S. Justice Department — its biggest financial seizure on record.
The digital assets have been directly linked to the 2016 hack of Bitfinex, when coins now worth $4.5 billion were stolen.
Two people have been arrested in Manhattan on suspicion of attempting to launder the stolen funds.
Deputy Attorney General Lisa O. Monaco said the successful operation shows "cryptocurrency is not a safe haven for criminals," adding:
"In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes."
Ilya Lichtenstein and his wife Heather Morgan are accused of conspiring to launder the proceeds of 119,754 BTC.
Court documents claimed that a hacker had managed to infiltrate Bitfinex's systems — initiating over 2,000 unauthorized transactions in the process. Stolen Bitcoin was subsequently sent to a digital wallet that Lichtenstein allegedly controlled.
An investigation suggests that 25,000 BTC was moved through a "complicated money laundering scheme" over the past five years — and some of the proceeds wound up in financial accounts that both Lichtenstein and Morgan controlled.
Court-authorized search warrants of their online accounts later uncovered private keys to the digital wallet where 94,000 BTC taken from Bitfinex all those years ago was stored.
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'Criminals Always Leave Tracks'
Detectives described the defendants' techniques for laundering the crypto as "methodical and calculated." As well as relying on fictitious identities, funds were mixed through crypto exchanges and darknet markets — all with a view to obscuring transaction histories and throwing law enforcement agencies off the scent. Matthew M. Graves, U.S. Attorney for the District of Columbia, said in a news release:
"Cryptocurrency and the virtual currency exchanges trading in it comprise an expanding part of the U.S. financial system, but digital currency heists executed through complex money laundering schemes could undermine confidence in cryptocurrency."
The charges of conspiracy to commit money laundering and conspiracy to defraud the U.S. collectively carry a maximum sentence of 25 years behind bars.
About a week ago, WhaleAlert had detected that 94,643 BTC from the wallet linked to the Bitfinex hack had moved — in regular tranches of 10,000 BTC.
The hack has gone down in history as one of the biggest to affect a crypto exchange — and at the time, Bitcoin's value plunged from $600 to $400.
Back in the summer of 2020, Bitfinex had announced that it was willing to offer up to $400 million if the funds were returned — and even said that it would allow the hackers to keep 25% of the stolen property as long as they returned the rest.
In a statement on Tuesday, Bitfinex said:
"We are pleased that the U.S. Department of Justice has today announced that it has recovered a significant portion of the Bitcoin stolen during the August 2016 security breach. We have been cooperating extensively with the DoJ since its investigation began and will continue to do so."
It now plans to "follow appropriate legal processes to establish our rights to a return of the stolen Bitcoin."
